Activity Based Costing Analysis

A simplistic factory floor model where cost associated with product processing is calculated and analyzed using ABC. Each incoming product seizes some resources, is processed by a machine, conveyed, and releases the resources. Whenever the product is in the system, the existence cost applies. While a resource unit is being seized by a product, its busy cost is allocated to the product, otherwise idle cost is applied. Processing at the machine and conveying have direct fixed costs, which are different for equipment with different performance. Cost accumulated by a product is broken down into several categories for analysis and optimization. You can manually change the factory floor parameters on the fly and see how they affect the product cost. Alternatively, you can run the optimization experiment to search for the best parameter values automatically.